How to avoid under quoting

One of the most common mistakes new consultants make is under quoting. And if you don’t get this right you’ll continue to be out of pocket on every project.

Do either of these scenarios resonate with you……

You realise that you grossly underestimated how much time certain tasks would take.  So overall, you’re spending many more consulting days on the project than you estimated in your quote. 

You find yourself having to undertake some tasks that you hadn’t anticipated when you were preparing your proposal, so they weren’t factored into your project plan or your costs.

Not surprisingly, one of the most common mistakes new consultants make is under quoting.

It’s definitely a learning curve –  you’re transitioning from being an employee where your salary was paid at regular intervals like clockwork; the amount you were paid wasn’t based on the specific tasks undertaken in that pay period; you just got on with the job and received your salary as agreed.

But as a consultant all that changes because you’re now operating what is commonly known as a ‘time-for-money’ business. You need to be able to map out what you intend to do for your client over the project timeframe, identify exactly what you will deliver and when, and even harder, figure out how much time all this will take you so you can figure out the cost.

As a consultant, there are a number of things you just can’t charge your clients for [e.g. preparing proposals, marketing, running your business].  But for everything else, every day you work on a consultancy project should be a paid day.  And the only way to make sure of this is to become skilled at providing an accurate quote.

And my number one tip to avoid under quoting is to create a basic project plan for each consultancy project.  Because it’s all about figuring out with as much accuracy as you can, what you’re going to do in undertaking the project – how you intend to go about it. And that’s exactly what a project plan will achieve.  It may seem obvious but trust me, many new consultants don’t do this. Recently a new consultant asked for my help to review their first consultancy proposal and when I asked her how she had estimated the timeframes for the various aspects of the project she said “I just guessed”.  So rather than make this mistake, which will almost definitely result in you being out of pocket, follow my steps below to prepare a basic project plan for your consultancy proposal that will assist you to identify the time and costs.

Step 1: Break the project down into phases

In my experience, almost every consultancy project can be broken down into four or five key phases.  The ones I most commonly use are these:

  • planning/preparation
  • information gathering
  • analysis
  • report writing

Step 2: Identify all the major consultancy tasks involved in each phase

Now you need to identify each of the major tasks you’ll have to undertake in each phase of the project.

Step 3: Map out each major task in more detail to figure out all the process steps that will be required

Identifying the major tasks is important, but it won’t help you to figure out how much time you’re going to need.  To do that you need to drill down further and figure out what I call the process steps, which are basically the steps that will take you from A to B to C.

Step 4: Estimate a realistic time frame for each process step

Because the process steps are more detailed, it’s now feasible to figure out with a degree of accuracy how long it will take you to complete each of those steps.

Step 5: Add up process steps to estimate time for each major task and add to the proposal

Now you can easily add up the time you’ve allocated to each process step to reach an accurate estimate of the time it will take to undertake the major task.

So let’s look at an example.

Project Phase: Information gathering 

Major task – Conduct stakeholder consultations

Quoting table
Now I totally understand that for many of you this is going to seem tedious, especially if you’re a big picture person.  And essentially it is tedious.  But it’s also absolutely necessary. There simply aren’t any shortcuts that I know of.  And it will get easier the more you do it.  So for a little bit of pain now, you will reap the rewards later and trust me, when you’re in the thick of the project, you’ll be very grateful that you’ve taken the time to do this.

Jacq Hackett provides expert consulting services to public health agencies. And as a veteran of over two decades of consulting, she now provides coaching and development for other consultants. She is passionate about supporting the next generation of public sector consultants to become very good at what they do.

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1 Comment. Leave new

  • raostrategicsolution
    March 31, 2022 2:50 pm

    Being a new consultant, I had been a bit skeptical on how to avoid under quoting, because I know how horrible consequence can be in the end with this silly mistake. It had been one of the toughest learning curve for me, each day I’m trying to improve it, still had a few queries and Yeah! I have found the answer through your post. I will no longer keep it more complex, but will divide the project down into phases. Thanks.

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